USD/JPY analysis: weakening yields support a bearish extension

USD/JPY Current price: 112.62

The USD/JPY pair posted a modest advance this Monday, ending the day at 112.63, and having met selling on an advance up to its 200 DMA, around 112.90. The JPY saw little action at the beginning of the week as Japan banks were closed on a local holiday, with the main event scheduled for this week being the BOJ's monetary policy meeting early Thursday, but no big surprise is expected from Kuroda this time. US Treasury yields traded marginally lower daily basis, indicating a possible yen recovery for the upcoming sessions. In the meantime, the pair continues finding support around 112.30, the 38.2% retracement of the latest bullish run, and below the mentioned 200 DMA, with the scale lean towards the downside. In the 4 hours chart, the early advance was unable to surpass a still bullish 20 SMA, while technical indicators have retreated from their mid-lines, supporting a bearish extension on a break below the mentioned Fibonacci support and with scope then to test the 111.60 region.

Support levels: 112.30 111.90 111.60

Resistance levels: 112.90 113.20 113.50

View Live Chart for the USD/JPY

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